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At Tech Firms, Executive-Level HR Specialists Reap the Rewards

Technology and life science organizations are increasingly recognizing the value of human resources and its strategic role in helping recruit, develop and reward talent. In turn, salaries and the opportunity to earn incentives have increased for HR professionals.

For HR positions at these firms, cash compensation varies considerably by specialization and job level. To highlight these differences, the
Culpepper Operations Compensation Survey (U.S. database as of Feb. 1, 2008) examined data across four common HR job families:

For director and manager levels, recruiting leads the way with the highest total targeted cash compensation (Figure 1). Median total targeted cash compensation for directors and managers in specialized HR jobs averages 7 percent to 30 percent higher than directors and managers in general HR jobs. Differences between HR job families for non-management positions are less pronounced.

Proceeding up the range of job levels from independent contributors to director level, increases in compensation are not always consistent. For example, pay levels for advisory-level positions often will stick out like a sore thumb. Advisory-level employees typically have over 10 years of experience and are considered skilled experts in their field. In critical job functions, companies will often pay advisory-level employees at market rates close to or above manager-level positions.

This is the case for advisory-level HR generalists and managers. The median total targeted cash compensation for advisory level HR managers is $94,000, while HR advisers earn $95,000.

(Note: the key box in the above and subsequent figures reference job codes used in the
Culpepper Operations Compensation Survey, which includes more than 150
operations job families, including 23 HR job families.)

The recruiting job family encompasses recruiting of all types of job positions including operations, sales, technical and executive employees. Pay levels for recruiters that focus on filling technical positions and executive positions can vary considerably from general recruiters. Technical and executive recruiters are more likely to receive bonuses than recruiters filling other types of positions.

For example, the median total targeted cash compensation for incentive-eligible independent-contributor-level technical recruiters is $80,900. In comparison, the median total targeted cash compensation for independent-contributor-level general recruiters not eligible for incentives is $55,400.

This emphasizes how important it is to not only consider the specificity of job responsibilities but to also consider whether or not a position is eligible to receive incentives.

Targeted Short-Term Cash IncentivesHistorically, HR employees were less likely to be eligible for short-term cash incentives than employees in other job functions. However, in recent years as HR has expanded its role beyond administrative duties to become more of a strategic player in organizations, we have seen an increase in both the percent of HR employees eligible for short-term cash incentives and the amounts targeted.

Figure 2 shows the percent of HR employees eligible to receive short-term cash incentives. For most job levels, employees in general HR jobs are less likely to receive short-term cash incentives than employees specializing in recruiting or compensation and benefits.

Targeted short-term cash incentives include the sum total of all forms of variable cash compensation including bonuses, commissions, cash profit sharing and other forms of variable cash payments targeted to be paid to an employee for performing 100 percent of expected results. Short-term cash incentives are typically earned within a 12-month period and may vary by employee and/or corporate objectives.

Targeted Short-Term Cash Incentives as Percent of Base SalaryFigure 3 shows the average amount of short-term cash incentives as a percent of base salary. Across most job levels, recruiters typically receive the highest mix of short-term cash incentives.

Other Factors to ConsiderIn addition to considering job responsibilities, experience and incentive eligibility, it is critical to consider the impact of geographic location when market pricing cash compensation for HR jobs. Company size can also influence HR pay, particularly for manager- and director-level positions.

W. Leigh Culpepper is president and CEO of
Culpepper and Associates Inc., which conducts worldwide salary surveys and provides benchmark data for compensation and employee benefit programs.